Correlation Between Firsthand Alternative and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Alger Spectra at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Firsthand Alternative and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Alger Spectra Fund, you can compare the effects of market volatilities on Firsthand Alternative and Alger Spectra and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Firsthand Alternative with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Alger Spectra.
Diversification Opportunities for Firsthand Alternative and Alger Spectra
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Alger is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Firsthand Alternative is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Firsthand Alternative Energy are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Alger Spectra go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Alger Spectra
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Alger Spectra. In addition to that, Firsthand Alternative is 1.43 times more volatile than Alger Spectra Fund. It trades about -0.01 of its total potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,678 in Alger Spectra Fund on September 4, 2024 and sell it today you would earn a total of 1,591 from holding Alger Spectra Fund or generate 94.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Alger Spectra Fund
Performance |
| Timeline |
| Firsthand Alternative |
| Alger Spectra |
Firsthand Alternative and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Alger Spectra
The main advantage of trading using opposite Firsthand Alternative and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Alger Spectra can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alger Spectra will offset losses from the drop in Alger Spectra's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Alger Spectra vs. Gamco Global Telecommunications | Alger Spectra vs. Alliancebernstein National Municipal | Alger Spectra vs. T Rowe Price | Alger Spectra vs. T Rowe Price |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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